Google pays millions to French media to avoid licensing fees

PARIS -- Google (GOOG) is to pay $82 million into a special fund to help French media develop their presence on the Internet under a top-level deal signed on Friday, but will not pay them for posting links to their content.

French publishers had been pushing for Google to pay them licensing fees for listing headlines and snippets of articles in its search engine results.

The agreement, signed by President Francois Hollande and Google executive chairman Eric Schmidt, follows months of talks between local media companies and the Internet search giant that were brokered by a government-appointed mediator.

Google CEO, Eric Schmidt, left, and French President Francois Hollande sign an agreement at the Elysee Palace in Paris, Friday, Feb. 1, 2013. Google will help French news organizations increase their online advertising revenue and also set up a euros 60 million ($82 million) fund to finance digital publishing innovation, settling a dispute over whether the Internet giant should pay to display news content in its search results. (AP Photo/Philippe Wojazer, Pool)
(
Philippe Wojazer
)

Google settled a similar case with Belgian publishers in December by helping them boost online revenue, but still faces a dispute with publishers in Germany.

Schmidt said in a Google blog post on Friday's deal in France that in addition to paying into the fund, Google would help publishers increase their revenue using its advertising technology.

Hollande had threatened to draft legislation to force Google to pay media for posting links to their content if no deal was signed, and during the talks Google was hit with a tax audit over its practice of charging French advertisers via its European headquarters in Ireland.

In November satirical weekly Le Canard Enchaine said the government had demanded $1.28 billion in back taxes from the Mountain View company.